# In the matter of Rain Automotive India Pvt. Ltd. I.A. No.…..-CTB-2020, TP No. 105-CTB-2019 in CP(IB)No. 646-MB-2019

> NCLT judgment dated 13 May 2020. Citation: TCN-2020-NCLT-01361. The Resolution Professional filed an application under various sections of the Insolvency and…

- **Court:** NCLT
- **Order date:** 13 May 2020
- **Citation:** TCN-2020-NCLT-01361
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/rain-automotive-india-pvt-ltd-ia-no-ctb-2020-tp-no-105-ctb-2019-in-cpibno-646-mb-2f23e176

## Summary

### Background

The Resolution Professional filed an application under various sections of the Insolvency and Bankruptcy Code, 2016, seeking directions against the suspended board of directors of the Corporate Debtor for illegally withdrawing funds during the Corporate Insolvency Resolution Process (CIRP) in violation of moratorium orders.

## Facts

The Resolution Professional (RP), Mr. Shikhar Chand Jain, for Shree Vishnu & Energy Private Limited (Corporate Debtor), filed an application under Sections 67, 68, 69, 70, 72 and 74 of the Insolvency and Bankruptcy Code, 2016. This application sought directions against the suspended board of directors, Mr. Deepak K. Daga and Mr. Manoj Daga, for withdrawing Rs. 6,72,12,170.22 from the Corporate Debtor's bank account during the Corporate Insolvency Resolution Process (CIRP). Of this amount, Rs. 1,22,00,000/- was deposited back, leaving a balance of Rs. 5,50,12,170.22 outstanding.

## Issues and analysis

### Issue 1: Whether the directors of the Corporate Debtor violated the moratorium order by withdrawing funds…

**Ratio:** Withdrawal of funds from a corporate debtor's account during the moratorium period…

**Reasoning:** The NCLAT, in its order dated October 23, 2019, and subsequent modification on December…

**Interpretation:** The court interpreted Section 14 of the IBC as imposing a strict moratorium on…

**Application:** The directors' actions of withdrawing Rs. 5,50,12,170.22 from the Corporate…

## Parties

- **Judges:** Jinan…

## Timeline

- **September 27, 2019 — Moratorium…**: NCLT, Cuttack Bench passed a moratorium…
- **October 23, 2019 — NCLAT Or…**: Hon'ble NCLAT passed an order in Company…

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